Sipri: Global armaments spending climbs to almost two trillion dollars

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The amount is almost impossible to grasp: According to calculations by the peace research institute Sipri, global military spending rose to a staggering 1981 billion dollars (1,637 billion euros), or almost two trillion dollars, in the past year.

This is the highest amount since the Swedish Institute began recording military spending in 1988.

In their latest report, the researchers point to a one-off and special effect: Defense spending rose by 2.6 percent in real terms in 2020, while the global economy is expected to shrink by 4.4 percent in gross domestic product due to the corona pandemic.

So many countries invested more money in armaments while their civil economies were in recession.

This is also related to the different response times to current developments.

While military budgets tend to be planned in the medium term, other economic indicators react more quickly.

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The Sipri researchers point out that ex-US President Donald Trump put more money into the US defense budget, by far the largest military budget in the world.

As a result, US military spending continued to climb in 2020.

USA again at the top - by far

The opposite effect of increasing military spending to a declining global economy led to the fact that 2.4 percent (plus 0.2 percentage points) of the global gross domestic product is now accounted for by military spending.

But that is an average value with considerable differences depending on the region.

The Swedish peace researchers analyze the data from 150 countries.

Some figures, for example from China, need to be estimated.

The Sipri calculations are - in absolute figures - above the latest information from the British research institute IISS from London, which put global military spending at 1.83 trillion dollars in 2020, 3.9 percent more in real terms than in the previous year.

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Unsurprisingly, the US is once again in the lead in terms of global military spending.

According to Sipri, the budget was $ 778 billion.

This shows an interesting development: Although spending in 2020 was 4.4 percent higher than in 2019, it was at least ten percent lower than in 2011. The USA now spends 3.7 percent of its gross domestic product on armaments.

In second place in the armaments ranking is China with military spending estimated by Sipri of over 252 billion dollars.

This is only a slight plus compared to the previous year, but a huge 76 percent more than in 2011. For 26 years in a row, military spending has been increasing in China.

The government in Beijing spends comparatively little of its economic output (gross domestic product) on armaments - namely only 1.7 percent.

Rheinmetall boss raves about the super cycle

There were hardly any changes in 2020 for the five states with the highest military spending.

The USA, China, India and Russia remain in the top four places.

Number five is now Great Britain and no longer Saudi Arabia.

Taken together, the top five military expenditures account for 62 percent of all global military expenditures.

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Germany climbed from eighth to seventh place in 2020, with military spending of 52.8 billion dollars.

According to Sipri, this is 5.2 percent more than in 2019 and 28 percent more than in 2011. The expenditures correspond to 1.4 percent of the German gross domestic product.

In 2020, Germany was one of the countries with the opposite development between the civil economy and the armaments industry.

According to initial calculations, the price-adjusted gross domestic product fell by five percent last year, i.e. a recession, while Rheinmetall boss Armin Papperger, for example, raves about the super cycle or the super economy for the armaments industry.

Industry analysts are now following with great interest how much money governments are still spending on the military against the backdrop of the economic downturn caused by the corona pandemic, rising national debt and rising health care costs.

The analysts of the London-based institute IISS assume that it will probably take until 2022/23 for military budgets to shrink worldwide in response to the corona pandemic.

Three countries have no military at all

Industry experts point out that the military are demanding even more money against the background of further developments in armaments technology.

For example, the US is pumping considerable resources into so-called hypersonic weapons in order to come on a par with Russia.

The military also see the growing importance of drones in military conflicts.

Insiders speak of the fight for billions because not all of the military's wishes can be fulfilled.

In Germany, for example, at the end of March the decision for a new missile defense system (TLVS - Tactical Air Defense System) at an estimated cost of 13 billion euros was put on hold by a joint venture between MBDA and Lockheed Martin.

Instead, the existing Patriot missiles are to be modernized from 2023 and the drone defense strengthened.

The Sipri researchers not only determine who spends a lot of money on armaments, but also those who are thrifty.

Of the 150 countries examined, only 24 spent three percent of their gross domestic product (GDP) or more on the military.

The country with the lowest military exposure in 2020 was Haiti (below 0.01 percent of GDP).

Costa Rica, Iceland and Panama have no military at all - and therefore no arms expenditure.